How to make and stick with a budget

It can be tough to create and stick to a budget, but tracking your spending and saving can soon lead to more financial security and better peace of mind. First, you just have to identify your budgeting personality and establish priorities.

Step 1: Know why you’re budgeting. 

What’s your primary motivation? Perhaps it’s to build an emergency fund or pay off your credit cards. Maybe you want to buy a house or save for retirement. Budgeting will be more enjoyable if it’s not just a chore but a tool to achieve something you care about

Step 2: Figure out what you’re spending. 

If you rarely pay with cash, look at your credit card and bank statements to see what you spent last month. If you do use cash regularly, keep track of all your purchases starting on the first of the month, then supplement those notes with your statements to get a picture of your total spending. How do your expenses compare to your take-home pay?

Step 3: Analyze your spending and refine your goals. 

How much are you spending by category? Knowing this information can help you see where you’re on track and where you need to cut back. Also, identify which expenses are fixed (like your housing payment), which are variable (like groceries) and which are irregular (like insurance). Use this information to plan an annual budget divided by month so you’ll never be caught off guard

Step 4: Choose the right approach. 

Investigate your options and then commit to budgeting on paper, with a spreadsheet or with a budgeting app — whatever makes the most sense to you (this way, you’re more likely to stay consistent).

Ready to get started?